UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-KSB/A
                                (Amendment No. 1)

(Mark One)

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

[_]   TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

                  FOR THE TRANSITION PERIOD FROM __________ TO __________
                  COMMISSION FILE NUMBER ________________________________

                            Phantom Fiber Corporation
                 (Name of small business issuer in its charter)

              DELAWARE                                    04-2451506
              --------                                    ----------
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  incorporation or organization)

          144 Front Street, Suite 580 Toronto, Ontario, Canada M5J 2L7
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone Number: (416) 703-4007

                     Pivotal Self Service Technologies Inc.
             13980 Jane Street, King City, Ontario, Canada, L7B 1A3
              (Former name, former address and former fiscal year,
                         if changed since last report)

Securities registered under Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$.001 par value

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

      State issuer's revenues for its most recent fiscal year. $98,417

      State the aggregate market value of voting and non-voting Common Stock
held by non-affiliates of the registrant as of April 13, 2005: Common stock,
$.001 par value: $ 15,544,564

      The number of shares of the Company's Common Stock outstanding as of April
13 , 2005: 268,009,730 shares.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

    Transitional Small Business Disclosure Format (check one): Yes [_] No [X]

<PAGE>




                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              Page
                                                PART I
<S>                                                                                           <C>
Item 1.   Description of Business.............................................................  1
Item 2.   Description of Property.............................................................  1
Item 3.   Legal Proceedings...................................................................  1
Item 4.   Submission of Matters to a Vote of Security Holders.................................  1

                                                PART II

Item 5.   Market for Common Equity and Related Stockholder Matters............................  2
Item 6.   Management's Discussion and Analysis or Plan of Operation...........................  3
Item 7.   Financial Statements................................................................  8
Item 8.   Changes In and Disagreements with Accountants on Accounting and Financial Disclosure  8
Item 8A.  Controls and Procedures.............................................................  8
Item 8B.  Other Information...................................................................  8

                                                PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act...................................  9
Item 10.  Executive Compensation.............................................................. 10
Item 11.  Security Ownership of Certain Beneficial Owners and Management...................... 11
Item 12.  Certain Relationship and Related Transactions....................................... 12
Item 13.  Exhibits............................................................................ 13
Item 14.  Principal Accountant Fees and Services.............................................. 14

SIGNATURES.................................................................................... 15
</TABLE>



<PAGE>
                                     PART I

Item 1. Description of Business.

      The business of Phantom Fiber Corporation (the "Company") (formerly known
as Pivotal Self Service Technologies Inc, Wireless Ventures Inc. and Hycomp,
Inc.) is conducted through its wholly-owned Canadian subsidiary Phantom Fiber
Inc. headquartered in Toronto Canada.

      Phantom Fiber is a leading developer of wireless software applications and
mobile solutions that empowers enterprises with high- performance functionality
on today's mobile devices and global communication networks. Phantom Fiber has
developed a wireless platform that extends the rich multimedia content and user
experience of existing Internet web sites securely and instantly to PDAs and
Cell Phones. Applications based on this platform can be applied to any
enterprise requiring a mobile solution. Instances of usage could include remote
monitoring, stock research, logistics and distribution, trading, and gaming.

      The Company derives revenue through the sale of its proprietary software
and custom integration services. Its business model is to generate initial
revenue from integration/customization services and derive recurring revenue
from usage-based licensing. It approaches the industry with a low implementation
cost and utilizes a rapid deployment strategy through reusable software objects.
Phantom Fiber utilizes its proprietary Smart Streaming(TM) data transmission
technique to deliver high-speed client side performance that intuitively adapts
to device and network properties. Information is securely packaged and delivered
with complete end-to-end 128-bit encryption using today's most advanced security
techniques.

Item 2. Description of Property.

      The Company maintains its corporate executive offices at 144 Front Street,
Suite 580, Toronto, Ontario, Canada M5J 2L7 (Tel. 416-703-4007, Fax
416-703-0900). The offices are leased and are comprised of 6,200 square feet,
with a monthly rental of $8,000, expiring in April, 2009.

Item 3. Legal Proceedings.

      From time to time, the Company may become involved in various claims and
lawsuits incidental to its business. There are presently no material legal
proceedings pending or threatened against the Company.

      The Company is not a party to any material litigation, and there are no
material outstanding claims against the Company.

      As described in Note 11 b) of the Company's audited financial statements,
a specified level of working capital was to be available to fund the Company's
operations on a post-merger basis to December 31, 2004. Management is
negotiating terms with respect to this working capital requirement as well as
assessing the Company's alternatives. If the Company does not obtain the
specified level of working capital required, the Company may be required to
issue up to 40,000,000 additional compensatory shares of common stock to the
pre-merger stockholders of Phantom Fiber Corporation.

Item 4. Submission of Matters to a Vote of Security Holders.

      The Company did not submit any matter to a vote of security holders
through solicitation of proxies or otherwise during the fourth quarter of the
fiscal year covered by this annual report.

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<PAGE>

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

MARKET.

      The Company is authorized to issue 400,000,000 shares of Common Stock,
$.001 par value per share. At December 31, 2004, there were 260,689,071, shares
of Common Stock issued and outstanding, held by 350 stockholders of record.

      The price per share of the Company's Common Stock is quoted on the NASD's
over-the-counter Electronic Bulletin Board under the symbol "PHMF".

      The following table sets forth for the periods indicated the high and low
closing bid prices for its Common Shares in U.S. Dollars. These quotations
reflect only inter-dealer prices, without retail mark-up, mark-down or
commissions and may not represent actual transactions.

---------------------------------------------------
QUARTER ENDED             HIGH           LOW
---------------------------------------------------
March 31, 2003            $0.10         $0.05
---------------------------------------------------
June 30, 2003             $0.08         $0.04
---------------------------------------------------
September 30, 2003        $0.05         $0.01
---------------------------------------------------
December 31, 2003         $0.04         $0.02
---------------------------------------------------
March 31, 2004            $0.13         $0.03
---------------------------------------------------
June 30, 2004             $0.18         $0.07
---------------------------------------------------
September 30, 2004        $0.11         $0.03
---------------------------------------------------
December 31, 2004         $0.10         $0.03
---------------------------------------------------

      The Company does not expect to pay a cash dividend on its Common Stock in
the foreseeable future. Payment of dividends in the future will depend on the
Company's earnings and its cash requirements at that time.

COMMON STOCK

      Holders of Common Stock are entitled to one vote for each share held on
all matters voted upon by stockholders, including the election of directors. The
holders of Common Stock have no preemptive rights to purchase or subscribe for
any stock of the Company now or hereafter authorized or for securities
convertible into such stock. All of the outstanding shares of Common Stock are
fully paid and nonassessable. Upon any liquidation of the Company, the holders
of Common Stock are entitled to share ratably in assets available for
distribution to such stockholders. Holders of Common Stock are entitled to
receive dividends out of assets legally available therefore at such times and in
such amounts as the Board of Directors may from time to time determine.

      Shareholders are not entitled to cumulative voting rights, and
accordingly, the holders of a majority of the voting power of the shares voting
for the election of directors can elect the entire class of directors to be
elected each year if they choose to do so and, in that event, the holders of the
remaining shares will not be able to elect any person as a director of such
class.

                                       2
<PAGE>

PREFERRED STOCK

      The Company has an authorized class of Preferred Stock comprised of 2,000
share of $100 par value, 8% that are non-voting, convertible and redeemable. As
of December 31, 2004, no shares of Preferred Stock were issued or outstanding.

DIVIDEND RESTRICTIONS

      The terms of the instruments governing the future indebtedness of the
Company may contain restrictions on the payment of dividends and the making of
distributions on its capital stock (other than stock dividends) and the purchase
or redemption of outstanding capital stock of the Company. By reason of these
restrictions, the Company may be unable to pay dividends on its Common Stock for
some period, which cannot presently be estimated.

      The Company has not declared or paid any dividends on its Common Stock and
presently does not presently expect to declare or pay any such dividends in the
foreseeable future. The Company has not yet formulated a future dividend policy
in the event restrictions on its ability to pay dividends are created. See
"Dividends".

TRANSFER AGENT AND REGISTRAR

      The transfer agent and registrar for the Company is Corporate Stock
Transfer; 3200 Cherry Creek Drive South, Suite 430, Denver Colorado 80209
telephone (303) 282-4800.

      As long as the trading price of the Common Stock of the Company is below
$5.00 per share, the Common Stock is considered to be "penny stocks" that are
subject to rules promulgated by the Securities and Exchanges Commission (Rule
15-1 through 15g-9) under the Securities Exchange Act of 1934. These rules
impose significant requirements on brokers under these circumstances, including:
(a) delivering to customers the Commission's standardized risk disclosure
document; (b) providing customers with current bid and ask prices; (c)
disclosing to customers the broker-dealer's and sales representatives
compensation; and (d) providing to customers monthly account statements.

Item 6. Management's Discussion and Analysis or Plan of Operation.

Overview

      Certain matters discussed in this Annual Report may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and as such may involve risks and uncertainties.
These forward-looking statements relate to, among other things, expectations of
the business environment in which the Company operates, projections of future
performance, perceived opportunities in the market and statements regarding the
Company's goals. The Company's actual results, performance, or achievements
expressed or implied in such forward-looking statements may differ.

Current Business and Outlook

      Phantom Fiber develops interactive mobile technology that allows users to
experience internet-like graphics and internet-like speed in an end-to-end
secure solution for multiple mobile platforms. Phantom Fiber's customers include
network carriers such as Wind (Italy) and Telus Mobility (Canada), and online
casino and sports book service providers such as Golden Palace, Real-Time
Gaming, WagerWorks, Interactive Gaming and Wagering, Digital Gaming Solutions,
1X Sportsmarkets, IQ-Ludorum, CaribSports, and Parlay Entertainment. It also has
clients in the financial and mobile payments vertical and security and
remote-monitoring industry. Phantom Fiber's gaming and sports book customers
typically enter into exclusive multi-year, revenue-sharing agreements, under
which they use Phantom Fiber's technology to offer games to their subscribers
and are charged a monthly user fee or percentage of the revenues or income
generated from those games.

      In the latter half of 2004, the Company shifted its focus and resources to
the areas of marketing, brand-awareness, client expansion and site deployment.
In the past year, the number of mobile phones and Personal Digital Assistants
(PDA's) supported by Phantom Fiber's software has increased from 20 devices to
over 600 handheld

                                       3
<PAGE>

mobile phones and PDA's. Management believes that ongoing success will stem from
two areas: contract fulfillment through client deployments; and ongoing product
development to expand its technical differentiators and increase its industry
advantages. The Company intends to continue to enhance its product offering and
to introduce new features and products, as the market demands. As part of its
product development process, the Company works closely with its customers and
its distribution channels to ensure that such market needs are met or exceeded.

      Based upon the strong customer responses received to date, management
believes that the Company is steadily gaining recognition as a leading provider
of advanced presentation and internet speed to the mobile market. Phantom Fiber
has concentrated on establishing revenue-sharing arrangements in a rapidly
growing market sector and believes that the prospects are favorable for an
appreciation in shareholder value to occur by virtue of increasing market share
and achieving sustained profitability.

Results of Operations

      The Company recorded a net loss during its fiscal year ended December 31,
2004 of $1,524,049 ($0.008 per share) compared to a net loss of $273,743 ($0.002
per share) for the same period in the preceding year. The Company's transition
from a predominantly product development enterprise commenced in the second half
of the fiscal year ended December 31, 2004. The net loss for the year ended
December 31, 2004 had been anticipated by management as a result of the reverse
acquisition, investing in product development and support, organizational
infrastructure and establishing new customer outlets for product distribution.

      Total revenue increased $44,629 from $46,882 for the year ended December
31, 2003 to $91,511 for the year ended December 31, 2004. The largest proportion
of revenue in both these periods was derived in North America.

      Total operating expenses increased $1,488,223 from $319,398 for the year
ended December 31, 2003 to $1,807,621 for the year ended December 31, 2004, an
increase of 466%. The increase includes:

      * An increase in net research and development expenses to develop new
software products of $668,808 from $(96,550) for the year ended December 31,
2003 to $572,258 for the year ended December 31, 2004. Major increases in
various expense categories for the fiscal year ended 2004 occurred in salaries,
benefits and fees to full-time and contract professional staff (approximately
$350,400) and third-party software licensing expenses (approximately $4,200),
offset by net decreases in other expense categories of approximately $1,000. In
addition, research and development expenses for the year ended December 31, 2004
were reduced by approximately $303,200 with respect to cash refundable
government tax credits on qualified research and development activity. By
comparison, research and development expenses for the year ended December 31,
2003 were reduced by approximately $618,400 with respect to cash refundable
government tax credits on qualified research and development activity. In 2004
and upon becoming a public company, the Company's became entitled only to cash
refundable provincial tax credits for eligible expenditures, whereas in 2003 the
Company was entitled to cash refundable federal and provincial government tax
credits.

      * An increase in sales and marketing expenses to develop new distribution
channels for the Company's products of $175,939 from $149,162 for the year ended
December 31, 2003 to $325,101 for the year ended December 31, 2004. Major
increases in various expense categories for the fiscal year ended 2004 arose in
salaries and benefits (approximately $206,700), advertising and promotions
(approximately $5,300) market research (approximately $9,800) and net increases
in other expenses categories (approximately $100) offset by reductions in
consulting services of approximately $39,100 and in travel expenses of
approximately $6,900.

      * An increase in general and administration expenses of $643,476 from
$266,786 for year ended December 31, 2003 to $910,262 for the year ended
December 31, 2004. This change includes increased office and general
(approximately $557,000, of which $420,000 pertained to an augmentation of the
Company's investor relations program and $108,000 pertained to accruals for wage
arrears and vacation pay), professional fees incurred in connection with
completion of the reverse acquisition, preparation and filing of the Company's
Form 10-KSB and attendant financial and legal services (approximately $51,000),
increased office rental and occupancy expenses (approximately $39,400),
increased salaries and benefits chiefly as a result of adding two administrative
staff (approximately $30,000) and net increases in other expense categories
(approximately $6,300), offset by a reduction in consulting services of
approximately $40,200).

                                       4
<PAGE>

      During the year ended December 31, 2004, the Company recorded a gain on
disposal of its Battery Division of $391,874 (2003: $nil), a further earnout
relating to the divestment of the Battery Division of $35,500 (2003: $nil),
interest income of $6,906 (2003: $4,955) and a foreign exchange gain of $62,060
(2003: $nil) arising from the translation of the Company's Canadian dollar
denominated assets into US dollars during periods of weakening of the US dollar
vis-a-vis the Canadian dollar, offset by interest expenses and charges arising
on short-term borrowings, long-term debt and capital leases of $111,495 (2003:
$6,182), a loss on disposal of marketable securities of $109,534 (2003: $nil)
and settlement of a loan obligation of $83,250 (2003: $nil).

Critical Accounting Policies and Estimates

      The discussion and analysis of results of operations and financial
condition are based upon the consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America (GAAP). The preparation of these consolidated financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. Management evaluates the
estimates on an on-going basis, including those related to bad debts,
inventories, investments, customer accounts, intangible assets, income taxes,
and contingencies and litigation. Management bases its estimates on historical
experience and on various other assumptions that they believe to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. Note 2 of the "Notes to
Consolidated Financial Statements" of the Company's annual audited Consolidated
Financial Statements includes a summary of the significant accounting policies
and methods used in the preparation of the consolidated financial statements.
The following is a brief description of the more significant accounting policies
and methods the Company uses.

Investments

      The Company's investment in marketable securities is classified as
available for sale securities. Unrealized holding gains and losses are reported
as a net amount in a separate component of shareholders' equity until realized.

Revenue Recognition

      The Company recognizes software licensing revenues in accordance with all
applicable accounting regulations, including the American Institute of Certified
Public Accountants Statement of Position ("SOP") 97-2, "Software Revenue
Recognition," and SOP 98-9, "Modification of SOP 97-2 with respect to Certain
Transactions." Following the requirements of SOP 97-2, the Company recognizes
license revenues when all of the following conditions are met:

      o     there is a signed license agreement with the customer;

      o     the software product has been delivered to the customer;

      o     the amount of the fees to be paid by the customer is fixed or
            determinable; and

      o     collection of these fees is probable.

      The Company generally negotiates formal license agreements with its
customers. Each of the license agreements includes provisions for receipt of an
up-front license fee and royalties. Generally, service providers pay these
royalty fees either in the form of a one-time payment or as an on-going monthly
fee. On-going royalties are recognized monthly based on the number of
subscribers at month end. One-time royalties are recognized quarterly based on
the number of new subscribers at the end of each quarter.

                                       5
<PAGE>

      The Company may also negotiate license agreements that allow for the
payment of the initial license fee to be made in future instalments over a
period of less than a year. Revenues recognized in advance of the instalments
being due are recorded as unbilled revenues in the balance sheet.

      Maintenance and technical support revenues are recognized rateably over
the applicable service period, which is usually one year. Revenues derived from
professional services are recognized upon performance of the related services.
Revenues derived from license agreements containing multiple deliverables, such
as product licenses, maintenance and technical support and other services, are
allocated among the various deliverables based on the fair value of each
deliverable.

Allowance for Doubtful Accounts

      The Company records an allowance for doubtful accounts based on
specifically identified amounts that management believes to be uncollectible.
The criteria for allowance provision are determined based on historical
experience and the Company's assessment of the general financial conditions
affecting its customer base. If the Company's actual collections experience
changes, revisions to the allowance may be required.

Intangible Assets

      Long-lived assets, including intangible assets, are reviewed when facts
and circumstances indicate that the carrying value of the asset may not be
recoverable. When necessary, impaired assets are written down to estimated fair
value based on the best information available. Fair value is determined by
estimated future cash flows and appraised value of the assets.

Financial Condition

      Total assets increased $932,200 from $511,924 at December 31, 2003 to
$1,444,124 as at December 31, 2004, an increase of 182%. The increase is due
primarily to an increase in marketable securities (approximately $962,600),
accounts receivable (approximately $20,900), prepaid expenses (approximately
$10,700) and increased property, plant and equipment (approximately $32,900),
offset by a reduction in cash of approximately $300 and a reduction in
investment tax credits receivable of approximately $94,600.

      At December 31, 2004, the Company held 1,145,000 common shares of Wireless
Age Communications, Inc., and 3,000,000 shares of Trackpower Inc., both publicly
traded entities whose share price is quoted on the NASD's over-the-counter
Electronic Bulletin Board under the symbols "WLSA" and "TPWR" respectively. The
Wireless Age securities were obtained in the sale of the Prime Wireless
subsidiary on March 13, 2003 and in the sale of the battery business on
September 14, 2004. The Company has valued these securities at $812,950 ($0.71
per share). The Trackpower securities were obtained as partial payment for a
receivable. The Company has valued these shares at $149,649 ($0.05).

      Total liabilities increased $1,300,745 from $344,502 at December 31, 2003
to $1,645,247 as at December 31, 2004, an increase of 378%, and reflects
liabilities assumed in the reverse acquisition as well as an increase in
short-term borrowings and accounts payable from operations. Major increases
arose in accounts payable and accrued liabilities (approximately $887,800),
short-term borrowings (approximately $203,800), notes payable (approximately
$109,700), senior subordinated convertible debentures (approximately $66,500)
and increases in capital lease obligations (approximately $33,000).

      Stockholders' equity decreased $368,545 from $167,422 at December 31, 2003
to ($201,123) at December 31, 2004, a decrease of 220%. The decrease is the
result of:

      1.    A reorganization of the equity accounts resulting from the reverse
            acquisition of the Company. This reorganization resulted in an
            increase to equity based upon the value of the net assets acquired
            from Pivotal Self-Service Technologies Inc. of $1,083,101;

      2.    Issuance of convertible debentures totaling 625,630;


                                       6
<PAGE>

      offset by:

      1.    Unrealized loss on available for sale marketable securities of
            $535,378;
      2.    The net loss of $1,524,049 during the year ended December 31, 2004;
            and
      3.    Unrealized foreign exchange translation losses of $17,849 (recorded
            in accumulated other comprehensive income).

      The consolidated financial statements of the Company are prepared in
conformity with generally accepted accounting principles, which require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Some of the significant estimates required
to be made by management include the realizable value of intangible assets and
the fair value of common stock and common stock equivalents issued for services
or in settlement of obligations. Actual results could differ from those
estimates.

Liquidity and Capital Resources

      The Company reported a negative working capital of $229,601 at December
31, 2004 compared with a positive working capital of $154,748 at December 31,
2003 representing a decrease of $384,349, approximately 248%. As of December 31,
2004, the Company had cash and cash equivalents of $19,400 compared with cash
and cash equivalents of $19,742 at the end of the prior year, representing a
decrease in cash of $342.

      For the year ended December 31, 2004, cash used in operating activities
amounted to $849,455, primarily as a result of operating losses. Cash provided
by financing activities during the year ended December 31, 2004 amounted to
$689,368 resulting from an increase in short term borrowings of $203,784,
increases under capital lease obligations of $32,954 and increased common stock
under the convertible debenture of $625,630, offset by a reduction in notes
payable of $173,000. Cash provided by investing activities was $159,745 and was
chiefly derived from proceeds of sale of Wireless Age Communications, Inc.
common shares of $199,989 and cash assumed on the reverse acquisition of $5,541,
offset by an investment in property, plant and equipment during the year of
$45,785.

      At December 31, 2004, the Company did not have sufficient cash flow from
operations to satisfy its operational requirements and other cash commitments.
The Company has introduced expense reductions and anticipates receiving further
funding through term debt and/or the sale of its securities by private placement
and the exercise of outstanding warrants and options. There can be no assurance
that such funding sources will be secured or that the necessary regulatory
approval or closing of a private placement will occur, or that such funding will
be sufficient to eliminate the Company's reliance on additional sources and
quantities of funding. The Company has commenced liquidating its investment in
Wireless Age Communications, Inc. common shares. These securities, which have
been valued at $812,950 for balance sheet purposes, have certain resale
restrictions. Management believes that it will be in a position to sell all of
these securities within the next twelve months and utilize the proceeds for
working capital purposes.

      In addition, the Company has been successful in raising capital through
private placements of its common shares. Although, this type of financing
continues to be dilutive to the existing common shareholders, it may be
necessary to continue to do so in the interim before certain resale restrictions
on its marketable securities lapse.

      The Company does not have any material sources of liquidity on off balance
sheet arrangements or transactions with unconsolidated entities.

NEW ACCOUNTING PRONOUNCEMENTS

      In December 2004, the FASB issued FASB Statement No. 123 (revised 2004),
"Shared-Based Payment." Statement 123(R) addresses the accounting for
share-based payment transactions in which an enterprise receives employee
services in exchange for (a) equity instruments of the enterprise or (b)
liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
Statement 123(R) requires an entity to recognize the grant-date fair-value of
stock options and other equity-based compensation issued to employees in the
income statement. The revised Statement generally requires that an entity


                                       7
<PAGE>

account for those transactions using the fair-value-based method, and eliminates
the intrinsic value method of accounting in APB Opinion No. 25, "Accounting for
Stock Issued to Employees", which was permitted under Statement 123, as
originally issued. The revised Statement requires entities to disclose
information about the nature of the share-based payment transactions and the
effects of those transactions on the financial statements. The Company has not
yet evaluated the impact of adoption of this pronouncement which is effective
for the quarter beginning January 1, 2006.

      In December 2004, the FASB issued SFAS No. 153 "Exchanges of Nonmonetary
Assets-amendment of APB Opinion No. 29". Statement 153 eliminates the exception
to fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance, defined as transactions that are not expected to result in
significant changes in the cash flows of the reporting entity. This statement is
effective for exchanges of nonmonetary assets occurring after June 15, 2005. The
Company will adopt this Statement in fiscal 2005 and adoption is not expected to
have a material impact on the Company's financial position, results of
operations, or cash flows.

      In November 2004, the FASB ratified the Emerging Issues Task Force
("EITF") consensus on Issue 03-13, "Applying the Conditions in Paragraph 42 of
FASB Statement No. 144. "Accounting for the Impairment or Disposal of Long-lived
Assets," in Determining Whether to Report Discontinued Operations." The Company
will adopt this Statement in fiscal 2005 and adoption is not expected to have a
material impact on the Company's financial position, results of operations, or
cash flows.

      In November 2004, the FASB issued SFAS No. 151 "Inventory Costs - an
amendment of ARB No. 43, Chapter 4". Statement No. 151 requires that certain
abnormal costs associated with the manufacturing, freight, and handling costs
associated with inventory be charged to current operations in the period in
which they are incurred. Statement No. 151 is effective for fiscal years
beginning after June 15, 2005. The adoption of SFAS 151 is not expected to have
a material impact on the Company's financial position, results of operations, or
cash flows.

Item 7. Financial Statements.

      The consolidated financial statements of the Company for its fiscal year
ended December 31, 2004, are set forth at the end of this Form 10-KSB beginning
on page F-1 and are hereby incorporated by reference.

Item 8. Changes In and Disagreements With Accountants on Accounting and
        Financial Disclosure.

         None.

Item 8A. Controls and Procedures.

      As of the end of the period covered by this report, the Company conducted
an evaluation, under the supervision and with the participation of the Company's
chief executive officer and principal financial officer of its disclosure
controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
Exchange Act). Based upon this evaluation, the Company's chief executive officer
and principal financial officer concluded that the Company's disclosure controls
and procedures are effective to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act
is: (1) accumulated and communicated to the Company's management, including the
Company's chief executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required disclosure; and (2)
recorded, processed, summarized and reported, within the time periods specified
in the Commission's rules and forms. There was no change to the Company's
internal controls or in other factors that could affect these controls during
the Company's last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.

Item 8B. Other Information.

      Not applicable.

                                       8
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Section 16(a) of the Exchange Act.

      The directors and officers of the company are as follows:

Name                     Age     Position
----                     ---     --------
Jeffrey T. Halloran      43      Director, Chief Executive Officer and President
Vince Bulbrook           46      Chief Financial Officer
Herbert C. Sears         37      Chief Technology
Gordon S. Fowler         56      Director
J. Graham Simmonds       31      Director

      Mr. Halloran became the Chief Executive Officer, President and Director of
the Company on January 7, 2002. From March 2001 to November 2001, he was the
Chief Executive Officer of Sona Innovations Inc., a wireless software company.
From March 1989 to February 2001, Mr. Halloran was the Chief Executive Officer
and President of Relational Solutions Inc., a computer systems consulting from.
From August 1987 to March 1989, he was a Consulting Manager for Oracle
Corporation regarding database consulting. Mr. Halloran graduated from St. Clair
College in 1982 with a degree in business administration.

      Mr. Bulbrook is the CFO of the Company. Mr. Bulbrook has been a partner of
The Sedona Group since February, 2003. Prior to that Mr. Bulbrook served as a
Director of Finance and Innovation of Financial Models Company a publicly traded
company, from 1999 through 2003. From 1994 until 1999 Mr. Bulbrook ran his own
independent consulting practice. Mr. Bulbrook was with Price Waterhouse as a
member of the technology practice from 1990 through 1994 and with Clarkson
Gordon (Ernst &Young) from 1984 until 1990 where he moved from the accounting
practice into providing corporate finance and restructuring services to
businesses, investors and lenders. Mr. Bulbrook earned an Honors BA in Business
Administration degree from The University of Western Ontario in 1984. Mr.
Bulbrook is a C.A. (Chartered Accountant) and is a member of the Canadian
Institute of Chartered Accountants, (1987).

      Mr. Sears has been the Chief Technology Officer of the Company since
January 2002. From November 2000 to December 2001, he was Vice
President-Technology of Sona Innovations Inc., engaged in software development.
From May 1996 to October 2000, Mr. Sears was the Director of Technology of
ANGOSS Software Corp. and was engaged in software development. From June 1992 to
May 1996, he was a Senior Developer and programmer employed by CS Computing
Services Inc. Mr. Sears graduated from DeVry Institute of Technology in 1989
with a degree in computer science.

         Mr. Fowler became a director of the Company on March, 2002. From
February 2003 to March 2005, he was interim Chief Executive Officer and
President of Nano-C, Inc. in Westwood, MA, engaged in nano technology. From 1999
to the present, Mr. Fowler has been the principal of SynCom Associates in
Boston, MA. From 1998 to 1999, he was the Chief Executive Officer and President
of NetConvergence, Inc. From 1995 to 1998, he was the Chief Executive Officer
and President of MUSE Networks, Inc. an internet e-commerce company. From 1993
to 1995, Mr. Fowler was the Director of Operations of Cray Communications, Ltd.
Mr. Fowler graduated from the University of Saskatchewan in Canada in 1970 with
a Bachelor of Science degree in mechanical engineering.

      Mr. Simmonds became a director of the Company on July 7, 2004. From May
2004 to the present, he has been the Chief Executive Officer and President of
Diversified Racing Investments Inc. From January 2004 to May 2004, he was a Vice
President of Simmonds Mercantile Products Inc. From February 2003 to December
2003, he was employed by Prime Battery products Limited engaged in business
development. From April 2001 to February 2003, Mr. Simmonds was self employed as
a horse breeder and horse industry consultant. From January 2001 to April 2001,
he was a Vice President of IRMG, Inc. From May 1999 to January 2001, he was the
General Manager of TrackPower Inc. Mr. Simmonds attended McGill University.

                                       9

<PAGE>

Item 10. Executive Compensation.

      The officers and directors of the Company received compensation during the
three fiscal years ended December 31, 2004, as follows:

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                          ANNUAL COMPENSATION                            LONG TERM COMPENSATION
                                         ----------------------                         AWARDS           PAYOUTS
                                                                                    -------------------------------
                                                            OTHER      RESTRICTED    SECURITIES                 ALL
NAME AND                                                    ANNUAL       STOCK       UNDERLYING    LTIP        OTHER
PRINCIPAL               FISCAL       SALARY      BONUS   COMPENSATION    AWARDS       OPTIONS     PAYOUTS   COMPESATION
POSITION                 YEAR         ($)         ($)        ($)          ($)         SARS (#)      ($)         ($)
-----------------------------------------------------------------------------------------------------------------------
<S>                      <C>         <C>         <C>          <C>         <C>           <C>        <C>         <C>
Jeffrey T. Halloran      2004        $179,300    $ -0-        $ -0-       $ -0-        -0-         $ -0-       $-0-
Chief Executive          2003        $ 85,600    $ -0-        $ -0-       $ -0-        -0-         $ -0-       $-0-
Officer and President    2002        $ 85,600    $ -0-        $ -0-       $ -0-     3,300,000      $ -0-       $-0-
-----------------------------------------------------------------------------------------------------------------------

Vince Bulbrook           2004        $-0-        $ -0-        $29,050     $ -0-      $ -0-         $ -0-       $-0-
FORMER Chief             2003        $-0-        $ -0-        $ -0-       $ -0-      $ -0-         $ -0-       $-0-
Executive Officer        2002        $-0-        $ -0-        $ -0-       $ -0-      $ -0-         $ -0-       $-0-

-----------------------------------------------------------------------------------------------------------------------

John G. Simmonds         2004        $-0-        $ -0-        $ -0-       $ -0-      $ -0-         $ -0-       $-0-
FORMER Chief             2003        $55,573     $ -0-        $ -0-       $ -0-      $ -0-         $ -0-       $-0-
Executive Officer        2002        $-0-        $ -0-        $ -0-       $ -0-      $ -0-         $ -0-       $-0-

-----------------------------------------------------------------------------------------------------------------------
</TABLE>

Board Compensation

      The Company plans to provide its non-management directors, if any, a
competitive directors' compensation package comparable to programs offered by
similarly situated corporations.

Benefit Plans

      The Company does not have any profit sharing plan or similar plans for the
benefit of its officers, directors or employees. However, the Company reserves
the right to establish any such plans in the future.

Incentive Stock Plan

      Effective July 7, 2004, the Company adopted and approved its 2005
Incentive Stock Plan (the "Plan") which reserves 20,000,000 shares of Common
Stock for issuance under the Plan. The Plan allows us to issue awards of
incentive or non-qualified stock options, stock appreciation rights, and stock
bonuses which may be subject to restrictions. The Company issued stock options
to replace 2,000,000 Phantom Fiber Corporation stock options granted in February
2002. Each stock option will allow the holder to purchase 5.5 post-merger common
shares (11,000,000 common shares in aggregate) for an exercise price equal to
the exercise price of the Phantom Fiber Corporation stock options previously
held divided by 5.5, and with an expiry date and vesting provisions similar to
those of the previously outstanding stock options..

Compliance with Section 16(a) of the Securities Exchange Act of 1934

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent (10%) of its equity securities, to file reports of
ownership and changes in ownership with the U.S. Securities and Exchange
Commission. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.


                                       10
<PAGE>

      Based on its review of the copies of such forms received by it, the
Company believes that during the year ended December 31, 2004, all such filing
requirements applicable to its officers, directors and 10% owners of its Common
Stock were complied with.

Indemnification of Directors and Officers

      The Company is a Delaware corporation. Title 8, Chapter 1, Section 145 of
the Delaware Corporation Law provides authority for broad indemnification of
officers, directors, employees and agents of a corporation, with certain
specified exceptions.

      Article VIII of the By-Laws of the Company provides that the Company shall
have the power to pay or reimburse any present or former director or officer of
the Company any costs or expenses actually and necessarily incurred by that
officer in any action, suit, or proceeding to which the officer is made a party
by reason of holding that position, provided, however, that no officer shall
receive such indemnification if finally adjudicated therein to be liable for
negligence or misconduct in office. This indemnification shall extend to
good-faith expenditures incurred in anticipation of threatened or proposed
litigation. The Board of directors may in proper cases, extend the
indemnification to cover the good-faith settlement of any such action, suit or
proceeding, whether formally instituted or not.

      At the present time, the Company does not have any officer-director
liability insurance although permitted by Delaware law, nor does the Company
have indemnification agreements with any of its directors, officers, employees
or agent.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

      The following table sets forth certain information concerning the
beneficial ownership of the Company's shares of Common Stock by directors and
officers of the Company, and by each person known to the Company to be a
beneficial owner of five percent (5%) or more of its outstanding Common Stock as
of December 31, 2004.

                                                               Percentage of
       Name and Address             Number of Shares        Outstanding Shares
       ----------------             ----------------        ------------------
Jeffrey T. Halloran
6 Bunhill Court
Ajax, Ontario, Canada L154S7           87,241,000(1)(2)           32.6%

Lorraine Halloran
144 Front Street West
Suite 580
Toronto, Ontario, Canada
M5J 2L7                                                            6.2%
                                        16,500,000(1)

Herbert C. Sears
144 Front Street West
Suite 580
Toronto, Ontario, Canada
M5J 2L7                                  2,365,000(3)              .88%

Gordon S. Fowler
95 Lake Road Terrace
Wayland, MA 01778                          385,000(4)              .14%

J. Graham Simmonds
330 University Avenue
Toronto, Ontario, Canada
M5G 1R7                                      -0-                    0%

OFFICERS AND DIRECTORS AND               106,491,000              39.8%
RELATED OWNERS AS A
GROUP (ABOVE 5 PERSONS)

                                       11
<PAGE>

(1) They have sole voting and dispositive power with respect to their shares of
Common Stock of the Company.

(2) Includes 83,116,000 shares held by the Halloran Family Trust and stock
options to purchase 4,125,000 shares of Common Stock, being comprised of
3,300,000 options to Mr. Halloran and 825,000 options to Bernadette Halloran, at
an exercise price of $0.0114 per share.

(3) Represents a stock option to purchase 2,365,000 shares of Common Stock of
the Company at an exercise price of $.0114 per share.

(4) Represents a stock option to purchase 385,000 shares of Common Stock at an
exercise price of $.0114 per share.

Item 12. Certain Relationships and Related Transactions.

Loans From Related Parties

      i) On November 12, 2002, Mr. Brian Usher-Jones, a stockholder and director
of the Company, provided a $77,131 (CAD$100,000) loan by way of a note payable.
Under the terms of the loan agreement Mr. Usher-Jones would receive:

      (a) a fee of 5% of the amount borrowed;

      (b) 2% of the outstanding balance paid as interest on a monthly basis;

      (c) warrants to purchase 1,000,000 shares of the Company's common stock
for each 30 day period or part thereof that the borrowed funds are outstanding;
and

      (d) a further 5% fee if the loan is not repaid in 90 days.

      ii) Also on November 12, 2002, Mr. Neil Greenberg, the sole shareholder of
1500450 Ontario Limited which was deemed beneficially to own approximately 20.5%
of the Company's outstanding Common Shares, provided a $77,131 (CAD$100,000)
loan to the Company on the same terms as Mr. Usher-Jones.

      iii) On December 29, 2003, the Company entered into a settlement agreement
with Mr. Brian Usher-Jones pursuant to which the Company agreed to pay $101,041
(CAD$131,000) in cash on January 2, 2004 as full and complete repayment of the
loan. As part of the settlement Mr. Usher-Jones agreed to forgive all fees and
warrants issuable under the terms of the loan. On January 23, 2004, the Company
entered into a Settlement Agreement with Mr. Neil Greenberg. Under the terms of
the settlement, the Company transferred 50,000 shares of Wireless Age
Communications, Inc. common stock to Mr. Greenberg in payment of the loan. As
part of the settlement, Mr. Greenberg agreed to forgive all interest and
warrants issuable under the original loan agreement and the Company also agreed
to adjust the number of Wireless Age Communications, Inc. common shares as
follows: In the event that the closing price is less than $3.00 per share of
Wireless Age common stock on the earlier of (i) the date such stock becomes
freely tradable under Rule 144, or (ii) the date such stock becomes freely
tradable under an effective registration statement filed by Wireless Age, then
the Company shall issue to Mr. Greenberg an additional number of shares of
Wireless Age common stock equal to the excess of (x) US$150,000 divided by the
average per share closing price of Wireless Age common stock for the 5 trading
days immediately prior to such date, over (y) 50,000.

      iv) On January 23, 2004, the Company transferred 50,000 Wireless Age
Communications, Common Shares (marketable securities) to Neil Greenberg and
1500450 Ontario Inc., a related party (related by virtue of their ownership
position in the Company), in repayment of promissory notes of $162,000. The
Company also agreed to adjust the number of shares in the event that the closing
share prices is less than $3.00 on the earlier of: (1) the date which the shares
become freely trading under securities legislation, or (2) the date the shares
are freely tradable under a registration statement.

      On February 18, 2005, the Company negotiated a final settlement of this
matter under which it agreed to issue 500,000 shares of its capital stock at a
deemed value of $30,000 and transferred 75,000 shares of common stock of
Wireless Age Communications Inc. at a deemed value of $53,250. This aggregate
amount of $83,250 has been accrued as a settlement of loan obligation in the
statement of operations at December 31, 2004.

                                       12
<PAGE>

      v) Officers, and certain persons related to officers have provided $35,903
in a prior period to fund operations of the Company. This loan is included in
short term borrowings. It is unsecured, non-interest bearing and has no formal
repayment terms.

Phantom Fiber Acquisition

      Pursuant to the terms of the share exchange agreement between the Company
and Phantom Fiber, upon Closing on July 7, 2004, the holders of an aggregate of
CAD1,200,000 (approximately $919,750) principal amount of convertible debentures
of Phantom Fiber Corporation received an aggregate of 30,000,000 shares of the
Company's common stock and warrants exercisable until the second anniversary of
the Closing to purchase 15,000,000 shares of the Company's common stock at an
exercise price of $0.084 per share. The Company's former directors, Brian
Usher-Jones and John G. Simmonds, each held CAD$100,000, and the Company's
former Secretary, Carrie Weiler, held CAD$25,000, principal amount of such
Phantom Fiber debentures. Accordingly, upon the Closing, Mr. Usher-Jones, Mr.
Simmonds and Ms. Weiler received 2,500,000, 2,500,000 and 625,000 shares of the
Company's common stock and 1,250,000, 1,250,000 and 312,500 warrants,
respectively.


Private Sales Transaction

      On January 13, 2005, the Company entered into a private sales transaction
with a former officer, director and shareholder of Pivotal Self-Service
Technologies Inc., Mr. John G. Simmonds, under which the Company agreed to
deliver 800,000 shares of common stock of Wireless Age Communications Inc. for
cash consideration of $600,000 and 3,000,000 shares of common stock of
Trackpower Inc. for cash consideration of $150,000. The transaction, as amended
March 30, 2005, provides for periodic delivery of these shares in quantities
proportionate to cash payments received as a percentage of the total proceeds of
the transaction. As at March 31, 2005, the Company has received $324,200 under
this transaction and has delivered 345,813 shares of common stock of Wireless
Age Communications Inc. and 1,296,800 shares of common stock of Trackpower Inc.

Item 13.      Exhibits.

<TABLE>
<CAPTION>
Exhibit
Number                                                Description
---------   ------------------------------------------------------------------------------------------------
<S>         <C>
2.1         Share exchange  agreement  dated April 21, 2004 between  Phantom Fiber  Corporation and Pivotal
            Self-Service  Technologies  Inc.  (Incorporated  herein by reference to the Company's  Form 8-K
            filed with the Securities and Exchange Commission on July 22, 2004)
2.2         Asset Purchase  Agreement dated September 15, 2004 by and between Phantom Fiber Corporation and
            Wireless Age  Communications  (Incorporated  by reference to the Company's  Form 8-K filed with
            the Securities and Exchange Commission on July 22, 2004)
10.1        2005 Stock  Option,  SAR and Stock Option Plan is  incorporated  herein by reference to Exhibit
            10.1 to the Form S-8 registration statement (Reg. No. 333-122730), filed on February 11, 2005.
21          Subsidiaries  (Incorporated  by reference to the Company's annual report on Form 10-KSB for the
            fiscal year ended  December 31, 2004,  filed with the  Securities  and Exchange  Commission  on
            April 15, 2005)
31.1        Certification  by Chief Executive  Officer and Principal  Financial  Officer,  required by Rule
            13a-14(a) or Rule 15d-14(a) of the Exchange Act
32.1        Certification  by Chief Executive  Officer and Principal  Financial  Officer,  required by Rule
            13a-14(b)  or Rule  15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of
            the United States Code
</TABLE>

                                       13

<PAGE>

Item 14. Principal Accountant Fees and Services.

      Fees paid to principal accountants are as follows:

<TABLE>
<CAPTION>

Name                               Audit Fees    Audit Related Fees   Tax Fees    All other fees
<S>                               <C>            <C>                  <C>       <C>
Mintz & Partners LLP for fiscal
year ended

December 31, 2003                   $ 35,400         $ 17,000         $ 5,600     $    14,500
                                    --------         --------         -------     -----------
December 31, 2004                   $ 31,500          $ nil            $ nil      $    13,700
                                    --------         --------         -------     -----------
</TABLE>

      As of December 31, 12004, the Company had not established an audit
committee of the Board of Directors, and the entire Board of Directors performed
the duties of an audit committee. The Board of Directors evaluated the scope and
cost of the audit for its fiscal year ended December 31, 2004 before its auditor
rendered its audit and non-audit services.























                                       14
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        PHANTOM FIBER CORPORATION


      Dated: November 14, 2005          By:  /s/ Jeffrey T. Halloran
                                             -----------------------------------
                                             Jeffrey T. Halloran
                                             Chief Executive Officer, President,
                                             Principal Financial Officer and
                                             Principal Accounting Officer

      In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.


<TABLE>
<CAPTION>

SIGNATURE                                   TITLE                                       DATE
---------                                   -----                                       ----

<S>                                        <C>                                         <C>
 /s/ Jeffrey T. Halloran                    Chief Executive Officer, President,         November 14, 2005
------------------------------------
Jeffrey T. Halloran                         Principal Financial Officer, Principal
                                            Accounting Officer and Director

 /s/ Gordon S. Fowler                       Director                                    November 14, 2005
------------------------------------
Gordon S. Fowler

</TABLE>









                                       15

<PAGE>

                        CONSOLIDATED FINANCIAL STATEMENTS

                            PHANTOM FIBER CORPORATION
                (FORMERLY PIVOTAL SELF-SERVICE TECHNOLOGIES INC.)

                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003



INDEX

INDEPENDENT AUDITORS' REPORT                                         F-2

CONSOLIDATED BALANCE SHEET                                           F-3

CONSOLIDATED STATEMENTS OF OPERATIONS                                F-4

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY       F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS                                F-6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                       F-7





















                                      F-1


<PAGE>

REPORT OF INDEPENDENT REGISTERED AUDITORS

TO THE STOCKHOLDERS OF
PHANTOM FIBER CORPORATION

We have audited the accompanying consolidated balance sheet of Phantom Fiber
Corporation, as at December 31, 2004, and the related consolidated statements of
operations, changes in stockholders' deficiency and cash flows for the years
ended December 31, 2004 and 2003. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Phantom Fiber
Corporation at December 31, 2004, and the results of its operations and its cash
flows for the years ended December 31, 2004 and 2003 in conformity with
accounting principles generally accepted in the United States of America.

As described in the notes, the accompanying consolidated financial statements
have been prepared assuming the Company will continue as a going concern. At
December 31, 2004 the Company had an accumulated deficit of $2,496,674. The
continued operating losses raise substantial doubt about the Company's ability
to continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the going concern assumption not
being applicable.

/s/ Mintz & Partners LLP
"Mintz & Partners LLP"
Chartered Accountants
Toronto, Ontario
March 30, 2005






                                      F-2
<PAGE>


                            PHANTOM FIBER CORPORATION
                           Consolidated Balance Sheet
                             As at December 31, 2004

<TABLE>
<CAPTION>
ASSETS

CURRENT ASSETS:
<S>                                                                               <C>
     Cash                                                                         $    19,400
     Accounts receivable                                                               41,244
     Marketable securities (note 3)                                                   962,599
     Investment tax credit receivable                                                 353,340
     Prepaid expenses                                                                  14,414
                                                                                  -----------

TOTAL CURRENT ASSETS                                                                1,390,997

PROPERTY, PLANT AND EQUIPMENT (note 4)                                                 53,127
                                                                                  -----------

TOTAL ASSETS                                                                      $ 1,444,124
                                                                                  ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
     Accounts payable                                                             $ 1,077,179
     Short term borrowings (note 5)                                                   340,920
     Current portion of obligation under capital leases (note 4)                       26,274
     Notes payable (note 6)                                                           109,725
Senior subordinated convertible debentures (note 7)                                    66,500
                                                                                  -----------

TOTAL CURRENT LIABILITIES                                                           1,620,598
                                                                                  -----------

Obligation Under Capital Leases (note 4)                                               24,649
                                                                                  -----------

                                                                                    1,645,247
STOCKHOLDERS' DEFICIENCY (note 8)

PREFERRED STOCK, $100 par value, 8%, non-voting, convertible, redeemable, 2,000
     shares authorized, No shares issued and outstanding
COMMON STOCK, $.001 par value, 400,000,000 shares authorized,
     260,689,071 shares, issued and outstanding at December 31, 2004                  260,689
ADDITIONAL PAID-IN CAPITAL                                                          2,532,909
                                                                                  -----------

                                                                                    2,793,598

ACCUMULATED DEFICIT                                                                (2,496,674)

ACCUMULATED OTHER COMPREHENSIVE LOSS                                                 (498,047)
                                                                                  -----------

TOTAL STOCKHOLDERS' DEFICIENCY                                                       (201,123)
                                                                                  -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                    $ 1,444,124
                                                                                  ===========
</TABLE>

                                      F-3

<PAGE>

                            PHANTOM FIBER CORPORATION
                      Consolidated Statements of Operations
                 For the Years Ended December 31, 2004 and 2003



<TABLE>
<CAPTION>
                                                                2004                     2003
--------------------------------------------------------------------------------------------------

REVENUE
<S>                                                       <C>                      <C>
     Consulting services                                  $        91,511          $        46,882

                                                          ----------------------------------------

                                                                   91,511                   46,882
                                                          ----------------------------------------

OPERATING EXPENSES:
     Research and development                                     572,258                  (96,550)
     Sales and marketing                                          325,101                  149,162
     General and administrative                                   910,262                  266,786
                                                          ----------------------------------------

Total operating expenses                                        1,807,621                  319,398
                                                          ----------------------------------------

OPERATING LOSS BEFORE OTHER INCOME (EXPENSES)                  (1,716,110)                (272,516)

OTHER INCOME (EXPENSES)
     Interest expense                                            (111,495)                  (6,182)
     Interest income                                                6,906                    4,955
     Loss on disposal of marketable securities                   (109,534)                       -
     Gain on disposal of Battery Business                         391,874                        -
     Earnout on Battery Business                                   35,500                        -
     Settlement of loan obligation (note 12 (c))                  (83,250)                       -
     Gain (loss) on foreign exchange                               62,060                        -
                                                          ----------------------------------------

NET LOSS                                                  $    (1,524,049)         $      (273,743)
                                                          ========================================

EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
     Weighted average number of common shares
         outstanding (note 2 i))                              197,365,773               131,247,999
      Loss per share                                      $        (0.008)         $         (0.002)
</TABLE>




                                      F-4

<PAGE>



                            PHANTOM FIBER CORPORATION
     Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
                 For the Years Ended December 31, 2004 and 2003

<TABLE>
<CAPTION>
------------------------------------ ------------------- ------------------- ------------------- -------------------
                                        Common stock        Common stock      Additional paid          Other
                                           Number            Par Value           in capital        Shareholders'
                                                                                                       Equity
------------------------------------ ------------------- ------------------- ------------------- -------------------
                                            (#)                 ($)                 ($)                 ($)
------------------------------------ ------------------- ------------------- ------------------- -------------------
<S>               <C> <C>                   <C>                     <C>                                     <C>
Balance, December 31, 2002                  119,405,000             119,405                                 490,293
------------------------------------ ------------------- ------------------- ------------------- -------------------
Issuance of Series A stock                   18,005,735              18,006                                 163,043
------------------------------------ ------------------- ------------------- ------------------- -------------------
Issuance of convertible debentures            9,593,476               9,593                                 284,527
------------------------------------ ------------------- ------------------- ------------------- -------------------
Net loss for the year ended
December 31, 2003
------------------------------------ ------------------- ------------------- ------------------- -------------------
Adjustment arising from foreign
exchange translation loss
------------------------------------ ------------------- ------------------- ------------------- -------------------
Balance, December 31, 2003                  147,004,211             147,004                                 937,863
------------------------------------ ------------------- ------------------- ------------------- -------------------
Issuance of convertible debentures           20,406,524              20,407             605,223
------------------------------------ ------------------- ------------------- ------------------- -------------------
Adjustment arising from
reorganization due to reverse
acquisition                                  93,278,336              93,278           1,927,685           (937,863)
------------------------------------ ------------------- ------------------- ------------------- -------------------
Net loss for the year ended
December 31, 2004
------------------------------------ ------------------- ------------------- ------------------- -------------------
Adjustment arising from unrealized
loss on marketable securities
------------------------------------ ------------------- ------------------- ------------------- -------------------
Adjustment arising from foreign
exchange translation loss
------------------------------------ ------------------- ------------------- ------------------- -------------------
Balance, December 31, 2004                  260,689,071             260,689           2,532,909                   -
------------------------------------ ------------------- ------------------- ------------------- -------------------
</TABLE>

<TABLE>
------------------------------------ ------------------- ------------------- -------------------
                                        Accumulated      Accumulated other         Total
                                          Deficit          comprehensive        Stockholders
                                                            income (loss)          Equity
                                                                               /(Deficiency)
------------------------------------ ------------------- ------------------- -------------------
                                            ($)                 ($)                 ($)
------------------------------------ ------------------- ------------------- -------------------
<S>               <C> <C>                     <C>                    <C>                <C>
Balance, December 31, 2002                    (698,882)              84,431             (4,753)
------------------------------------ ------------------- ------------------- -------------------
Issuance of Series A stock                                                              181,049
------------------------------------ ------------------- ------------------- -------------------
Issuance of convertible debentures                                                      294,120
------------------------------------ ------------------- ------------------- -------------------
Net loss for the year ended
December 31, 2003                             (273,743)                               (273,743)
------------------------------------ ------------------- ------------------- -------------------
Adjustment arising from foreign
exchange translation loss                                          (29,251)            (29,251)
------------------------------------ ------------------- ------------------- -------------------
Balance, December 31, 2003                    (972,625)              55,180             167,422
------------------------------------ ------------------- ------------------- -------------------
Issuance of convertible debentures                                                      625,630
------------------------------------ ------------------- ------------------- -------------------
Adjustment arising from
reorganization due to reverse
acquisition                                                                           1,083,101
------------------------------------ ------------------- ------------------- -------------------
Net loss for the year ended
December 31, 2004                           (1,524,049)                             (1,524,049)
------------------------------------ ------------------- ------------------- -------------------
Adjustment arising from unrealized
loss on marketable securities                                     (535,378)           (535,378)
------------------------------------ ------------------- ------------------- -------------------
Adjustment arising from foreign
exchange translation loss                                          (17,849)            (17,849)
------------------------------------ ------------------- ------------------- -------------------
Balance, December 31, 2004                  (2,496,674)           (498,047)           (201,123)
------------------------------------ ------------------- ------------------- -------------------
</TABLE>

                                      F-5

<PAGE>

                            PHANTOM FIBER CORPORATION
                      Consolidated Statements of Cash Flows
                 For the Years Ended December 31, 2004 and 2003


<TABLE>
<CAPTION>
                                                                    2004                     2003
-------------------------------------------------------------------------------------------------------

OPERATING ACTIVITIES
<S>                                                            <C>                      <C>
     Cash received from customers and governments              $       468,409          $       197,816
     Cash paid to suppliers and employees                           (1,271,364)                (792,103)
     Interest received                                                   6,906                    4,957
     Interest paid                                                     (97,617)                  (6,182)
     Foreign exchange gain (loss)                                       44,211                  (29,251)
                                                               ----------------------------------------
                                                                      (849,455)                (624,763)
                                                               ----------------------------------------
FINANCING ACTIVITIES
     Series A preference shares                                              -                  181,049
     Convertible debenture                                             625,630                  294,120
     Obligation under capital leases                                    32,954                   17,969
     Note payable                                                     (173,000)                       -
     Increase in short term borrowings                                 203,784                  114,973
                                                               ----------------------------------------
                                                                       689,368                  608,111
                                                               ----------------------------------------
INVESTING ACTIVITIES
     Purchase of property, plant and equipment                         (45,785)                 (25,886)
     Cash received from reverse acquisition                              5,541                        -
     Proceeds from the sale of marketable securities                   199,989                        -
                                                               ----------------------------------------
                                                                       159,745                  (25,886)
                                                               ----------------------------------------

DECREASE IN CASH AND CASH EQUIVALENTS                                     (342)                 (42,538)
CASH, BEGINNING OF YEAR                                                 19,742                   62,280
                                                               ----------------------------------------

CASH, END OF YEAR                                              $        19,400          $        19,742
                                                               ========================================
NON CASH FINANCING ACTIVITIES:

     Assets and liabilities acquired pursuant to reverse
     acquisition:
         Marketable securities                                 $       930,000                        -
         Battery business                                              315,126                        -
         Prepaid expenses                                              324,100                        -
         Accounts payable and accrued liabilities                     (277,441)                       -
         Notes payable                                                (147,725)                       -
         Senior subordinated convertible debentures                    (66,500)                       -
     Marketable securities received for settlement of
         Note receivable                                               135,000                        -
         Earnout on sale of Battery Business (note 1(c), 3)             35,500                        -
</TABLE>


                                      F-6

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

a) Description of Business

The business of Phantom Fiber Corporation (the "Company") (formerly known as
Pivotal Self Service Technologies Inc, Wireless Ventures Inc. and Hycomp, Inc.)
is conducted through its wholly-owned Canadian subsidiary Phantom Fiber Inc.
headquartered in Toronto, Canada.

It is engaged in the business of the sale and licensing of its proprietary
wireless software platform and integration services. Phantom Fiber uses its
software platform to extend the rich multimedia content and user experience of
its customers' existing Internet web sites securely and instantly to the PDAs
and cell phones of mobile users.

Phantom Fiber derives its revenue from direct sales of various licensing and
revenue sharing plans that allow its revenues to grow based upon the adoption
rate of its customer's end users.

b) Reverse Acquisition Transaction

On July 7, 2004, the Company (formerly known as "Pivotal Self-Service
Technologies Inc.") completed a reverse acquisition of privately held Phantom
Fiber Corporation, an Ontario corporation. The merger was effected pursuant to a
Share Exchange Agreement dated April 22, 2004 (the " Agreement") by and among
the Company and Phantom Fiber Corporation. In accordance with the terms of the
Agreement, the Company merged with and into Phantom Fiber Corporation, with
Phantom Fiber Corporation remaining as the surviving corporation and a wholly
owned subsidiary of the Company.

Pursuant to the Agreement, the outstanding shares of common stock of Phantom
Fiber Corporation, converted into an aggregate of 167,410,735 shares of the
Company's common stock, which represented 64 percent of the Company's
outstanding voting stock after giving effect to the merger. The transaction is
recorded as a reverse acquisition since the Phantom Fiber Corporation
stockholders became the controlling stockholders of the Company. Accordingly,
the transaction is accounted for as the issuance of stock by Phantom Fiber
Corporation for the net monetary assets of the Company accompanied by a
recapitalization of Phantom Fiber Corporation and no goodwill or any intangible
assets are recorded. Prior period results and comparatives are those of Phantom
Fiber Corporation and its subsidiary. Based on the price of the Company's common
stock on July 7, 2004 of $0.08 per share, the purchase price approximated
$13,393,000. In connection with the merger, the Company changed its name from
"Pivotal Self-Service Technologies Inc." to "Phantom Fiber Corporation".

Pursuant to the terms of the share exchange agreement between the Company and
Phantom Fiber, upon Closing on July 7, 2004, the holders of an aggregate of
CAD1, 200,000 (approximately $919,750) principal amount of convertible
debentures of Phantom Fiber Corporation received warrants exercisable until the
second anniversary of the Closing to purchase 15,000,000 shares of the Company's
common stock at an exercise price of $0.084 per share (see Note 8 (c))..

The Company also issued stock options to replace 2,000,000 Phantom Fiber
Corporation stock options existing prior to the merger. Each stock option will
allow the holder to purchase 5.5 post-merger common shares (11,000,000 common
shares in aggregate) for an exercise price equal to the exercise price of the
Phantom Fiber Corporation stock options previously held divided by 5.5, and with
an expiry date and vesting provisions similar to those of the previously
outstanding stock options.

                                      F-7

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued)

Certain contingent adjustments exist with respect to the share exchange and
valuation described above (see note 11 (b).

c) Disposition of Prime Battery

The Company disposed of the all of the shares of its Prime Battery Products
Limited ("Prime Battery") subsidiary plus additional assets and liabilities
(together, the "Battery Business") in a transaction that was signed and
consummated on September 15, 2004.

The Battery Business was sold to Wireless Age Communications Inc. ("Wireless
Age") for the following consideration: (i) 700,000 restricted common shares of
Wireless Age; and (ii) 200,000 additional restricted common shares ("Earnout
Shares") of Wireless Age as an earnout over a one year period. The Earnout
Shares are issuable on November 30, 2004 (see Note 3), February 28, 2005, May
31, 2005 and August 31, 2005 if Prime Battery continues to earn royalties under
existing agreements with Simmtronics Limited and SureCells Portable Power Ltd.

d) Going Concern and Basis of Presentation

These financial statements have been prepared on the going concern basis, which
assumes the realization of assets and liquidation of liabilities in the normal
course of business, notwithstanding the significant operating losses for the
year ended December 31, 2004 and the deficit as at December 31, 2004. The
ability of the Company to continue as a going concern is dependent on the
Company's ability to generate future profitable operations and receive continued
support from its lenders, shareholders and raise external financing for which
there can be no assurance regarding the success thereof. As mentioned in note 12
(a), the Company intends to obtain cash from the sale of its available-for-sale
securities.

e) Comparative figures:

Certain comparative figures have been reclassified to conform with the financial
statement presentation adopted in the current year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Use of estimates

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the period.
Actual results may differ from these estimates.

b) Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based on specifically
identified amounts that management believes to be uncollectible. The criteria
for allowance provision are determined based on historical experience and the
Company's assessment of the general financial conditions affecting its customer
base. If the Company's actual collections experience changes, revisions to the
allowance may be required.

                                      F-8

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

c) Acquisitions and business combinations

The Company accounts for acquisitions and business combinations under the
purchase method of accounting. The Company includes the results of operations of
the acquired business from the acquisition date. Net assets of the companies
acquired are recorded at their fair value at the acquisition date. The excess of
the purchase price over the fair value of net assets acquired are included in
intangible assets in the accompanying consolidated balance sheets.

d) Revenue recognition

The Company recognizes software licensing revenues in accordance with all
applicable accounting regulations, including the American Institute of Certified
Public Accountants Statement of Position ("SOP") 97-2, "Software Revenue
Recognition," and SOP 98-9, "Modification of SOP 97-2 with respect to Certain
Transactions." Following the requirements of SOP 97-2, the Company recognizes
license revenues when all of the following conditions are met:

      o     there is a signed license agreement with the customer;

      o     the software product has been delivered to the customer;

      o     the amount of the fees to be paid by the customer is fixed or
            determinable; and

      o     collection of these fees is probable.

The Company generally negotiates formal license agreements with its customers.
Each of the license agreements includes provisions for receipt of an up-front
license fee and royalties. Generally, service providers pay these royalty fees
either in the form of a one-time payment or as an on-going monthly fee. On-going
royalties are recognized monthly based on the number of subscribers at month
end. One-time royalties are recognized quarterly based on the number of new
subscribers at the end of each quarter.

The Company may also negotiate license agreements that allow for the payment of
the initial license fee to be made in future instalments over a period of less
than a year. Revenues recognized in advance of the instalments being due are
recorded as unbilled revenues in the balance sheet.

Maintenance and technical support revenues are recognized rateably over the
applicable service period, which is usually one year. Revenues derived from
professional services are recognized upon performance of the related services.
Revenues derived from license agreements containing multiple deliverables,such
as product licenses, maintenance and technical support and other services, are
allocated among the various deliverables based on the fair value of each
deliverable.

                                      F-9

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

e) Intangibles and goodwill

The Company regularly reviews all of its long-lived assets, including goodwill
and other intangible assets, for impairment whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. Factors
the Company considers important that could trigger an impairment review include,
but are not limited to, significant underperformance relative to historical or
projected future operating results, significant changes in the manner of use of
the acquired assets or the strategy for the Company's overall business, and
significant negative industry or economic trends. When management determines
that an impairment review is necessary based upon the existence of one or more
of the above indicators of impairment, the Company measures any impairment based
on a projected discounted cash flow method using a discount rate commensurate
with the risk inherent in our current business model.

Significant judgment is required in the development of projected cash flows for
these purposes including assumptions regarding the appropriate level of
aggregation of cash flows, their term and discount rate as well as the
underlying forecasts of expected future revenue and expense. To the extent that
events or circumstances cause assumptions to change, charges may be required
which could be material.

f) Investments

The Company's investment in marketable securities is classified as available for
sale securities and is recorded at their fair value. Unrealized holding gains
and losses are reported as a net amount in a separate component of shareholders'
equity until realized.

g) Income taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes. Under SFAS
No. 109, deferred tax assets and liabilities are determined based on temporary
differences between the financial statement






                                      F-10

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and tax bases of assets and liabilities and net operating loss and credit
carryforwards using enacted tax rates in effect for the year in which the
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amounts expected to be realized.
A provision for income tax expense is recognized for income taxes payable for
the current period, plus the net changes in deferred tax amounts.

h) Financial instruments

The fair values of the financial assets and liabilities are indicated by their
carrying value. The fair value of non-interest bearing advances and notes
payable approximate their carrying value because they are due on demand, have no
terms of payment and are treated as payable on demand.

i) Net loss per share

For both 2004 and 2003, net loss per share has been computed using the net loss
for the year divided by the weighted average number of shares outstanding.
Diluted loss per share is not presented as the effects of convertible
debentures, warrants and options are anti-dilutive.

j) Foreign currency

The functional currency of the company is the U.S. dollar and the functional
currency of the wholly owned subsidiary located in Canada is the Canadian
dollar. Assets and liabilities of this subsidiary are translated to U.S. dollars
at year-end exchange rates and income statement items are translated at the
exchange rates present at the time such transactions arise. Resulting
translation adjustments, if material, are recorded as a separate component of
accumulated other comprehensive income, a component of stockholders' equity
(deficiency).

k) Investment tax credits

The Company's subsidiary is entitled to Canadian tax credits which are earned as
a percentage of eligible research and development expenditures incurred in each
taxation year. Investment tax credits earned relating to research and
development expenses and property, plant and equipment purchases are accounted
for as a reduction of the respective expenses and the cost of such assets.

l) Comprehensive income

Comprehensive Income includes the net exchange differences arising from the
translation of Canadian dollar denominated subsidiaries into US dollars and
accumulated unrealized holding gains and losses on the Company's available for
sale securities.

m) Recent accounting pronouncements

In December 2004, the Financial Accounting Standards Board {"FASB") issued
Statement No. 123(R), Share-Based Payments, which will require compensation
costs related to share-based payment transactions to be recognized in the
financial statements. As permitted by the predecessor Statement No.123, the
Company does not recognize compensation expense with respect to stock options
issued because the option price was no greater than the market price at the time
the option was issued. Statement 123(R) will be effective in the fiscal quarter
beginning January 1, 2006. The

                                      F-11

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

Company has not completed an evaluation of the impact of adopting Statement
123(R).

In December 2004, the FASB issued SFAS No. 153 "Exchanges of Nonmonetary
Assets-amendment of APB Opinion No. 29". Statement 153 eliminates the exception
to fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance, defined as transactions that are not expected to result in
significant changes in the cash flows of the reporting entity. This statement is
effective for exchanges of nonmonetary assets occurring after June 15, 2005. The
Company will adopt this Statement in fiscal 2005 and adoption is not expected to
have a material impact on the Company's financial position, results of
operations, or cash flows.

In November 2004, the FASB ratified the Emerging Issues Task Force ("EITF")
consensus on Issue 03-13, "Applying the Conditions in Paragraph 42 of FASB
Statement No, 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets, " in Determining whether to Report Discontinued Operations, which is
effective for us at the beginning of 2005. The Company will adopt this Statement
in fiscal 2005 and adoption is not expected to have a material impact on the
Company's financial position, results of operations, or cash flows.

m) Recent accounting pronouncements (continued)

In November 2004, the FASB issued Statement No. 151, Inventory Costs, an
amendment of ARB No.43, Chapter 4, to clarify that abnormal amounts of idle
facility expense, freight, handling costs and wasted material (spoilage) should
be recognized as current period charges, and that fixed production overheads
should be allocated to inventory based on normal capacity of production
facilities Statement No. 151 is effective for fiscal years beginning after June
15, 2005. The adoption of SFAS 151 is not expected to have a material impact on
the Company's financial position, results of operations, or cash flows.

n) Stock Options

The Company applies the disclosure provisions of SFAS No.123, "Accounting for
Stock-Based Compensation." Stock option awards continue to be accounted for in
accordance with APB Opinion No.25. As the number of shares to be issued and the
per share strike price are not subject to uncertainty, stock option grants are
accorded fixed accounting treatment. As a result, the Company does not record
compensation expense in connection with the granting of these stock options.

Had compensation cost for the employee and non-employee director stock options
been determined based on the fair value at the grant date for awards in 2004 and
2003 consistent with the provisions of SFAS No.123, net earnings would have been
reduced to the pro forma amounts indicated below (amounts in thousands)

                                         2004                 2003
                                   ----------------------------------

Net loss as reported               $     (1,524)         $       (274)
Pro forma compensation expense               21                    19
                                   ----------------------------------

Pro forma net loss                 $     (1,545)         $       (293)
                                   ==================================

There is no effect on loss per share.

                                      F-12

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. The following weighted average assumptions
were used in the model:

                                        2004                   2003
                                     ---------------------------------
Dividend yield                          nil                     nil
Expected volatility                      90%                     90%
Risk free interest rates                 3.5%                    2.6%
Expected lives (years)                   3.0                     3.0


o) Property, Plant and Equipment

Property, plant and equipment are carried at cost less accumulated amortization.
Amortization is calculated using the declining-balance method as follows.

Computer hardware 30% Office furniture and equipment 20%

Additions during the period are amortized at one-half the usual rate.

p) Capital leases

Leases that transfer the substantial obligations and benefits of ownership are
recorded as capital assets and a related obligation under capital leases.

3. MARKETABLE SECURITIES

The Company's available for sale marketable securities consist of the following:

<TABLE>
<CAPTION>
                                                    ORIGINAL           BOOK          UNREALIZED
                                    NUMBER            COST             VALUE         GAIN/(LOSS)
                                    -----------------------------------------------------------
<S>                                 <C>         <C>               <C>              <C>
Trackpower Inc.                     3,000,000   $     136,950     $     149,649    $     12,699
Wireless Age Communications Inc.    1,145,000       1,361,027           812,950        (548,077)
                                    -----------------------------------------------------------
                                                $   1,497,977     $     962,599    $    535,378
                                                ===============================================
</TABLE>

During July, 2004 the Company received 3,000,000 restricted shares of Trackpower
Inc. as partial payment for an amount due from a third party.

In September, 2004 the Company received 700,000 restricted shares of Wireless
Age at a market price of $1.01 through the disposition of its Battery Business
as described in Note 1(c).

In November, 2004, the Company received 50,000 restricted shares of Wireless Age
at a market price of $0.71 pursuant to its earnout resulting from the
disposition of its Battery Business as described in Note 1(c).

The remaining 395,000 shares of Wireless Age were acquired in conjunction with
the reverse acquisition transaction described in note 1 (b).

                                      F-13

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

4. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment comprises the following:



Computers and office equipment - cost                 $      71,671
Less: accumulated amortization                              (18,544)
                                                      --------------
                                                      $      53,127
                                                      =============

Included in the above property, plant and equipment are assets under capital
lease with a cost of $61,353 and accumulated amortization of $11,898. These
leases bear interest at varying rates from 9%-21%.

The future minimum payments due under these capital leases are:


           Years ending December 31:

           2005                                       $      26,274
           2006                                              19,348
           2007                                               5,301


5. SHORT TERM BORROWINGS
<TABLE>
<CAPTION>
<S>                                                                          <C>
   Advance from a shareholder, on demand, unsecured and non-interest bearing  $    27,595
   Advance from a party related to the principal shareholder, on
   demand, unsecured with monthly interest of 3%                                   62,250
   Advances from unrelated parties, on demand, unsecured at varying rates         100,422
   Bridge loan, on demand, unsecured with monthly interest payments of 3%         150,653
                                                                              -----------

   Total                                                                      $   340,920
                                                                              ===========

6. NOTES PAYABLE

   Non-interest bearing note payable (a)                                      $    57,500
   5 year non-interest bearing note payable (b)                                    52,225
                                                                              -----------

      Total                                                                   $   109,725
                                                                              ===========
</TABLE>

(a) In 2001, the Company restructured a $416,821 payable with a creditor,
whereby $76,821 was forgiven, $180,000 was satisfied through the issuance of 1.8
million shares of the Company's common stock, and a note payable of $160,000 was
issued and has since been paid down to $57,500. This amount is due on demand and
has therefore not been discounted.

(b) In 2002, the Company issued a non-interest bearing note payable to an
affiliate for $120,000 payable over 5 years at $2,000 per month commencing July
1, 2002 (this note was discounted to $106,000 representing its present value
using a 5% discount rate and has been paid down to $52,225). The Company issued
this note as part of the acquisition of Prime Wireless that was later disposed
of on March 13, 2003.

                                      F-14

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

7. 8% SENIOR SUBORDINATED CONVERTIBLE DEBENTURES

The senior subordinated convertible debentures totaling $66,500 at December 31,
2004, are subordinated to all other indebtedness, and bear interest at 8%
payable in arrears annually commencing March 6, 2001.

The principal portions mature on March 6, 2005. Each $0.25 of principal is
convertible into one share of common stock and one three year warrant to
purchase an additional share of common stock at an exercise price of $0.50 per
share. Management had determined that the value attached to the conversion
feature and the related warrants is insignificant and, therefore has not made an
adjustment to the debentures' carrying amount for these features. No payments of
interest have been made by the Company. The notes are technically in default and
therefore have been classified as current liabilities at December 31, 2004.
Subsequent to year-end, these debentures matured and amounts outstanding were
automatically converted into shares of common stock of the Company (see Note 12
d)).

8. CAPITAL STRUCTURE

(a) Authorized:
2,000 preference shares $100 par value; 8%, non-voting, convertible, redeemable
400,000,000 voting common shares, $0.001 par value

(b) Issued and outstanding (Number of shares) at December 31, 2004 260,689,071

(c) Warrants:

The Company has granted 17,508,074 warrants to purchase an aggregate of
17,508,074 common shares. All warrants are vested. The composition and exercise
prices of the warrants outstanding at December 31, 2004 are as follows:

                                           Weighted
                            Number          average
                       of warrants   exercise price       Expiry date
------------------------------------------------------------------------------
December 31, 2003        8,735,589        $  0.379                  -
Warrants granted        15,000,000           0.084                  -
Warrants expired        (6,227,515)         (0.500)                 -
------------------------------------------------------------------------------
December 31, 2004       17,508,074        $  0.193                  -
------------------------------------------------------------------------------
Comprised of:            1,000,000        $  0.020       February 28, 2005
                         1,250,000           0.040       November 14, 2005 (a)
                        15,000,000           0.084            July 7, 2006 (b)
                           102,172           0.500         August 13, 2006
                            77,951           0.500         October 8, 2006
                            77,951           0.500       November 20, 2006
------------------------------------------------------------------------------
                        17,508,074        $  0.193                  -
------------------------------------------------------------------------------

(a) Includes warrants to purchase 1,250,000 common shares at $0.04 per share
issued under a warrant agreement for which another 1,250,000 warrants,
exercisable at $0.10 per share are issuable upon exercise of the initial
warrants.

(b) Warrants issued on July 7, 2004 in connection with the Reverse Acquisition
described in note 1b) to purchase 15,000,000 common shares at $0.084

                                      F-15

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

8. CAPITAL STRUCTURE (continued)

(d) Stock options:

In connection with the Reverse Acquisition described in note 1b), the Company's
stock option plan was amended to increase the number of options to be issued
under the plan from a maximum of 3,000,000 options to a maximum of 20,000,000
options.

Options granted under the amended plan are being accounted for under Accounting
Principles Board Opinion No. 25 (APB Opinion No. 25), "Accounting for Stock
Issued to Employees". All options have been granted at a price equal to or
greater than the fair value of the Company's common stock at the date of the
grant.

A summary of the changes in the Company's stock option plan for the years ended
December 31, 2004 and December 31, 2003 is as follows:

<TABLE>
<CAPTION>
                                                            Year Ended                        Year Ended
                                                     December 31, 2004                 December 31, 2003
 --------------------------------------------------------------------------------------------------------
                                                              Weighted                          Weighted
                                             Number            average           Number          average
                                          of shares     exercise price        of shares   exercise price
 --------------------------------------------------------------------------------------------------------
<S>                                       <C>                   <C>           <C>                   <C>
 Balance at beginning of period           1,000,000             $0.12         1,150,000             $0.13
 Options granted                         11,000,000 (a)          0.01                 -                 -
 --------------------------------------------------------------------------------------------------------
 Options cancelled                         (400,000)            (0.10)         (150,000)            (0.25)
 --------------------------------------------------------------------------------------------------------

 BALANCE, END OF PERIOD                  11,600,000              0.02         1,000,000              0.12
 --------------------------------------------------------------------------------------------------------

 EXERCISABLE, END OF PERIOD              10,988,889             $0.02         1,000,000             $0.12
 --------------------------------------------------------------------------------------------------------

                                                              Weighted         Weighted         Weighted
                         Number             average            average           Number          average
    Exercise         of options      remaining life           exercise       of options         exercise
     Price          outstanding             (years)              price      exercisable            price
 -------------------------------------------------------------------------------------------------------
         $0.01       11,000,000 (a)             2.13             $0.01       10,338,889            $0.01
          0.10          500,000                 6.66              0.10          500,000             0.10
          0.25          100,000                 0.08              0.25          100,000             0.25
---------------------------------------------------------------------------------------------------------
 $.01 - 0.25         11,600,000                 2.31             $0.02       10,988,889            $0.02
---------------------------------------------------------------------------------------------------------
</TABLE>

(a) Options issued on July 7, 2004 in connection with the Reverse Acquisition
described in note 1b) to purchase 11,000,000 common shares at $0.0114 per common
share

                                      F-16

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

9. RELATED PARTY TRANSACTIONS

On January 23, 2004, the Company transferred 50,000 Wireless Age Communications,
common shares (marketable securities) to a related party (related by virtue of
their ownership position in the Company), in repayment of a promissory note of
$162,000. The Company also agreed to adjust the number of shares in event that
the closing share price is less than $3.00 on the earlier of; i) the date which
the shares become freely trading under securities legislation, or ii) the date
the shares are freely tradable under a registration statement.

Officers, and certain persons related to officers have provided $35,903 in a
prior period to fund operations of the Company. This loan is included in short
term borrowings. It is unsecured, non-interest bearing and has no formal
repayment terms.

10. INCOME TAXES

The company files US Federal income tax returns for its US operations. Separate
income tax returns are filed, as locally required, for each of its foreign
subsidiaries.

There was no provision for income taxes for the years ended December 31, 2004
and 2003.

The total provision for income taxes differs from that amount which would be
computed by applying the income tax rate to income (loss) before provision for
income taxes. The reasons for these differences are as follows:

<TABLE>
<CAPTION>
                                                   2004                      2003
                                                  Amount           %         Amount          %
                                                -----------      -----     ----------      -----
<S>                                             <C>              <C>       <C>              <C>
Statutory income tax rate (recovery)            $ (512,600)      (36)      $ (50,900)       (18)
Foreign Taxes Payable                                   ---         0             ---          0
Non-deductible items                                  1,600         0             700          1
Use of losses carried forward                           ---         0             ---          0
Other, including valuation
      Allowance adjustment                          511,000        36          50,200         17
Net taxes (recovery) and effective rate         $       ---         0      $      ---          0
</TABLE>

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the carrying amounts
and the tax basis of assets and liabilities and net operating loss
carry-forwards. Temporary differences and carry-forwards, which give rise to
deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                  2004                           2003
                                        Component      Tax Effect      Component     Tax Effect
                                        ----------     ----------      ---------     ----------
<S>                                     <C>            <C>
Net operating losses - domestic         $2,100,000     $ 714,000             ---           ---
Less valuation allowance                (2,100,000)     (714,000)            ---           ---
Net deferred asset                             ---           ---             ---           ---

Net operating losses - foreign          $1,750,000     $ 630,000        $751,000      $140,000
Less valuation allowance                (1,750,000)     (630,000)       (751,000)     (140,000)
Net deferred asset                             ---           ---             ---           ---
</TABLE>

As December 31, 2004, the Company had cumulative net operating loss
carry-forwards of approximately $2,100,000 and $1,750,000 in the United States
and Canada respectively. These amounts will expire in various years through
2021. The related deferred tax assets have been completely offset by a valuation
allowance. The Company has no significant deferred tax liabilities.

                                      F-17

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

11. COMMITMENTS AND CONTINGENCIES:

(a) Commitments:

The Company is committed to the following annual amounts in respect to its lease
of office space:

Years ending December 31:

                2005                               $   34,772
                2006                                   38,746
                2007                                   42,720
                2008                                   46,695
                2009                                   11,922

(b) Contingencies:

Pursuant to the Reverse Acquisition Transaction described in note 1 b), the
outstanding shares of common stock of Phantom Fiber Corporation, being comprised
of pre-merger stockholders owning 137,410,735 shares of common stock and
pre-merger convertible debenture holders having the equivalent of 30,000,000
shares of common stock, automatically converted into an aggregate of 167,410,735
shares of the Company's common stock which represented 64 percent of the
Company's outstanding voting stock after giving effect to the merger.

The valuation of and for the share exchange was based upon the Company having a
specified level of working capital to fund its operations on a post-merger basis
to December 31, 2004. In the event of a shortfall from the specified level of
working capital, the pre-merger stockholders of Phantom Fiber Corporation may be
entitled to a maximum of 40,000,000 compensatory shares of common stock of the
Company. The current management of Company is negotiating terms with respect to
this working capital requirement.

12. SUBSEQUENT EVENTS

a) Private Sales Transaction

On January 13, 2005, the Company entered into a private sales transaction with a
former officer, director and shareholder of Pivotal Self-Service Technologies
Inc. under which the Company agreed to deliver 800,000 shares of common stock of
Wireless Age Communications Inc. for cash consideration of $600,000 and
3,000,000 shares of common stock of Trackpower Inc. for cash consideration of
$150,000. The transaction, as amended March 30, 2005, provides for periodic
delivery of these shares in quantities proportionate to cash payments received
as a percentage of the total proceeds of the transaction. As at March 31, 2005,
the Company has received $324,200 under this transaction and has delivered
345,813 shares of common stock of Wireless Age Communications Inc. and 1,296,800
shares of common stock of Trackpower Inc.

b) 2005 Stock Option, SAR and Stock Bonus Consultant Plan and Conversion of Debt

On February 11, 2005, the Company announced a 2005 Stock Option, SAR and Stock
Bonus Consultant Plan (the "S-8 Plan") which authorized the Company through the
Committee that administers the S-8 Plan (the "Committee") to grant non-qualified
stock options with or without stock appreciation rights, SAR's and stock bonuses
to consultants of the Company. There are 17,500,000 shares of common stock of
the Company available for grant to participants designated by the Committee.
Directors, officers and employees of the Company are not eligible to participate
in this S-8 Plan. As at March 31, 2005,6,520,719 shares of common stock have
been issued from this S-8 Plan,of which approximately 5.1 million common shares
have been issued to various creditors in satisfaction of approximately $250,000
of trade and other liabilities outstanding as at December 31, 2004.

                                      F-18

<PAGE>

                            PHANTOM FIBER CORPORATION
                 Notes to the Consolidated Financial Statements
                      For the Year Ended December 31, 2004

12. SUBSEQUENT EVENTS (continued)

c) Settlement with Former Affiliate

On January 23, 2004, the Company transferred 50,000 of the Wireless Age shares
to an affiliate of the Company who had provided a loan of $162,000 per note 9 to
the Company in November 2002. The transfer of these shares was in payment of the
loan. The Company also agreed to adjust the number of shares in event that the
closing share price is less than $3.00 on the earlier of; i) the date which the
shares become freely trading under securities legislation, or ii) the date the
shares are freely tradable under a registration statement.

On February 18, 2005, the Company negotiated a final settlement of this matter
under which it agreed to issue 500,000 shares of its capital stock at a deemed
value of $30,000 and transferred 75,000 shares of common stock of Wireless Age
Communications Inc. at a deemed value of $53,250. This aggregate amount of
$83,250 has been accrued as a settlement of loan obligation in the statement of
operations at December 31, 2004.

d) Maturity and Conversion of 8% Senior Subordinated Convertible Debenture

Upon maturity of the 8% Senior Subordinated Convertible Debentures on March 6,
2005, each $0.25 of outstanding amounts under the debentures became subject to
an automatic conversion into one share of common stock and one three year
warrant to purchase an additional share of common stock at an exercise price of
$0.50 per share. As at March 6, 2005, the outstanding amounts under the
debentures which are subject to this automatic conversion amounted to $93,170,
being comprised of outstanding principal of $66,500 and unpaid interest of $
26,670. The Company has reserved 372,865 shares of common stock in relation to
the conversion of outstanding amounts under the debentures.

                                      F-19